e-books and the amazon saga

[davefreer]

A great deal has been said about the battle between Amazon and Macmillan and the role of Apple's new reader and agency model (which BTW generally leaves authors poorer - and is superficially not good for publishers either.) What hasn't really been said is WHY it's such a big fight. The nearest some people have come is 'it's about control' and 'e-

Comments

[paulcory]

I look at your numbers and see a case for eBooks opening more opportunities for authors. If you can stand the optimism and misplaced faith in publishers' greed, read on:

The lack of variable costs really does change the game. The fact that low selling books lose less money than they do now, especially figuring in the effect of returns, lowers the risk to publishers. So does elimination of reprinting and warehousing costs and hassles, which makes books more likely to become profitable over time.

Because bestsellers make more money than the current print regime allows for, publishers would have more profits to work with.

Because of the lack of physical stock and returns and unlimited shelf space, mid-list authors become less of a pain to hang onto, and generate more cash to boot. After all, in your example above, by 10,000 copies, the publisher is making a profit. At 20,000 copies, a book has generated $41,000 in profit.

And don't forget how the reduction in warehousing and reprinting costs makes backlist sales even more profitable. A book that sells 12,500 copies in over a 5 year span is a profitable book.

Put these all together, you have lower risk and higher reward for publishing any individual book. This should push publishers to increase the number of books they produce, in order to increase the number of big hits, because that's the formula for maximizing profit.

The disappearance of variable costs also reduces the cost of entry to the market. That means more new publishers, needing more authors. After all, if I could put together a stable 20 authors who produce a book a year that sells 10,000 copies in the initial go, and then average 1,000 copies a year for the next 5 years on back list, then I have a profitable venture.

This second part, however, is hostage to the number of etailing outfits, and their business practices. Even with unlimited shelf space, not all shelves are created equal. If the number of outfits selling eBooks shrinks down enough, they can start selling those high visibility virtual shelves at auction, and only the big boys will be able to play. It'll make them more money, but seriously damage the smaller publishers.

Which leads me to my next point: the real challenge in the eBook space (assuming eBooks rise to match the popularity and ubiquity of classic form analog books) is marketing. How do the folks possibly interested in your book find it from amidst the burgeoning hordes of books online? When nothing goes out of print, how does your book stand out on a list of thousands? Tens of thousands?

As for the poor content creator, it seems that eBooks would be an improvement. A 20% royalty, based on your figures, is a bigger cut of the pie than most authors get now. Whether it is a fair cut of the pie is another question entirely.

[davefreer]

The time factor - long tail really IS a major factor I agree. But the 20% figure is one major publishing company (guess which ;-)) whereas a number of others are paying 20% too... OF NETT - ie LESS than 15% of retail price which they used to get for hardcover (a lot of companies are shifting that too.) Now, I've been paid bonuses (in another industry) on nett before. Weirdly no matter how well you do the nett figure is very very low. The latest is that in a fit of crumb tossing after beating amazon into an agency system Macmillan (who only survived because of their authors are talking about maybe raising that to 25% of Nett (which in practice will equate to 12.5 - 14% of retail ie still less than hardcover, although there are no variable costs and the retailer cut is actually lower too. Generosity itself! Gratitude even.)